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INTRODUCTION TO ASPECTS OF CONTRACT
English law is the basis of common law in Wales and England. It is the mixture of legislation passed by the Parliament of UK, common law, the European law. The decision taken by Supreme Court of the United Kingdom is binding on the hierarchy of other courts (Slapper and Kelly, 2011.). In this context, present report is prepared to evaluate the essential elements required for formation of legally binding contracts and the different types of contracts that exist. In addition to this, strength and limitation of contracts, their terms as well as their effects are discussed. The rules of offer and acceptance in the given scenario and the difference between liability in tort and contractual liability are analyzed. The elements of tort of negligence and the fundamentals of vicarious liability are also evaluated.
TASK 1 ELEMENTS OF VALID CONTRACT
A legally binding agreement between two or more entities giving rise to obligations which may be imposed in the courts is known as contract. Parties enter into a contract to do something in exchange of valuable benefits which is known as consideration. Essential elements for formation of valid and legally binding agreement are enumerated below:
Offer: This can be understood as the explicit proposal which is made by offerer and when it is accepted by offeree then it completes the contract (Luo, 2002). This legally binds the offerer and offeree.
Acceptance: It is an implication by conduct or by express act that shows the consent of offeree for terms of contract in a required manner so as to form legally binding contract.
Intention to create legal relations: It is one of the necessary fundamentals for formation of contract. This consists of willingness of offeree to accept the legal terms to enter into the contract.
Consideration: It can be understood as something of value given by both the parties that encourage them to enter into the contract.
Capacity of parties: In order to form a valid contract, parties should have the competency capacity as they need to be of required age, not expressly declared void by any law and should be of sound mind (Deaki and et.al. 2007).
Errington v Errington Woods (1952) 1 KB 290, under this scenario, a house was purchased by father-in-law for his son and daughter-in-law to live in. The house was in the name of father and deposit was paid by him as a gift of wedding. He promised that if mortgage installments were paid by couple then he would transfer the house to them. The father died and the mother inherited the house. The son wants to live with mother after death of father but wife refuses to live with mother and she continues to pay the installments. Hence, there was a unilateral offer made by father that was accepted by couple by paying mortgage and therefore wife was entitled to remain in the house as there was intention to create legal relations.
Lampleigh v Braithwaite (1615) EWHC KB J17, in this scenario, a man was killed by defendant and hence the defendant was supposed to be hung for murder. The defendant asked the claimant to do everything to obtain a pardon and therefore claimant went to great efforts for the requested pardon. The promise was made by defendant that he will pay £100 to claimant for his efforts but never paid. Under this situation, consideration was valid as it was paid at the request of defendant.
Contract is a lawfully binding agreement between two or more parties to do something in exchange of valuable benefits which is known as consideration. There are different types of contracts that are enumerated below:
Oral contract: An agreement between two or more parties in which terms of contract take place through spoken words are known as oral contract (Harpwood, 2009). For example: Tom wants to buy book from Arnold and therefore he made an offer and on the other hand Arnold accepted that offer. Hence, oral contract will take place between both the parties as sale of textbook does not require written documentation.
Written contract: The contract between two or more entities in which terms are introduced through written documentation is referred as written contract. This can be used by parties as proof in case of fraud. For instance Neal wants to sell his house and therefore he made an offer through advertisement in newspaper. On the other hand, Karen read the newspaper and accepted the offer. Therefore the sales transaction between Neal and Karen regarding sale of house will take the form of written contract as transfer of ownership will require written docu